Woodside Energy Group Ltd (ASX: WDS) shares provide Australia and the world with critical fossil fuel-based energy sources during our multi-generation shift towards renewables.
Like every oil and gas stock, the S&P/ASX 200 Index (ASX: XJO) company is under ever-increasing pressure to reduce the carbon dioxide (CO2) emissions from its operations and end products.
To that end, here's how the carbon footprint from Woodside shares could be coming down further.
What's happening in Japan?
Earlier today, Woodside announced that it has signed a non-binding memorandum of understanding (MOU) with Japanese firm, Kansai Electric Power Co (KEPCO).
The MOU will see the companies study the potential for a carbon, capture and storage (CCS) value chain between Japan and Australia.
KEPCO will research the capture of CO2 emitted from its thermal power plants along with its transport to Australia.
The ASX 200 energy stock will in turn study the injection and storage of CO2 delivered from Japan. This will include evaluating storage opportunities in some of Australia's offshore basins.
Woodside will also examine the potential production of synthetic methane (e-methane).
Now, if you own Woodside shares, you're already investing in CCS technology.
The company has several CCS projects underway in Australia. Woodside has permits that enable carbon capture and storage assessments in the Browse Basin, Northern Carnarvon Basin and Bonaparte Basin.
And in its 2022 climate report, management noted, "We expect demand to increase for new energy products such as hydrogen and ammonia, and lower carbon services such as CCS…"
Commenting on the MOU just inked with KEPCO, Woodside executive vice president Shaun Gregory said the company was seeing increased demand for large-scale decarbonisation solutions from its Asia-Pacific industry partners.
According to Gregory:
CCS has the potential to provide a pathway for Woodside's customers and value chain participants in the region to decarbonise their own industrial emissions.
Australia, with its unique geology and offshore storage potential, has an opportunity to play a role in this emerging market, supporting the broader Asia-Pacific region in their climate goals and net zero aspirations.
How have Woodside shares been performing?
Woodside shares are up 12% over the past full year and up 7% in 2023.
